Breaking partition on system disk

I took over a Win 2003 standard server (which an AD) and found that the
system hdd is partitioned in to drives "C:" and "D:" with only 3.9 GB space
on "C:". The free space available on drive "C:" is only 500 MB after
removing some unwanted programs. I want to Deploy WSUS which needs atleast
1 GB free on "C:" Drive.

On drive "D:" there is only some data which I can easily back up. Is it
possible to break the partion and make this a single partition HDD without
losing data on C: ?
If not how to backup the system partition, and restore on the disk after
breaking the partition?

Thanks in advance